Background on The Startup Diversity and Inclusion Pledge
Soon after November 2016, I was thinking about how I could channel my emotions to effect positive change and I had the idea to develop a startup pledge for diversity and inclusion. Since then, I have been informally working with some folks to develop the idea. In July, Mary Ann Azevedo wrote an article in Crunchbase that mentioned the work I’ve been doing so I decided to write this short piece more fully explain my thinking. My goal in is to get enough thoughtful eyes on the project to launch, starting in Austin, later this year. You can read more about the pledge, subscribe to the email list, and let me know if you are interested in helping.
Diversity and inclusion matter for a wide variety of reasons, including that it is better for business, increases investment returns, lowers volatility and drives innovation. And while female founders receive less venture capital funding than their male counterparts, there’s data that says that female founders outperform their male peers. Our city, even more so than the country as a whole, struggles with racial and economic segregation and disparity. A focus on improving the diversity and inclusion in startups is certainly an area of opportunity for Austin.
The core idea of the Startup Diversity and Inclusion Pledge is that startups will pledge to take a few concrete measures in the way they operate their company that should, over time, increase the number of minorities, women and people who identify as LGBTQ in the startup community. Critically, with entrepreneurs making such a pledge from day one, there is an opportunity to increase the diversity of economic benefit from startup successes as a good portion of the opportunity for equity upside of a startup is determined in the earliest days of the company.
The centerpiece of the pledge is something I’ve named the Walker Rule, which is inspired by the NFL’s Rooney Rule, which was created by the late Dan Rooney, who was the former owner owner of the Pittsburgh Steelers and former chairman of the league’s diversity committee, in 2003. The Rooney Rule, which is supported by the Fritz Pollard Alliance, requires every NFL team to interview at least one minority candidate for head coach vacancies. In the years following its implementation, the number of minorities hired to fill head-coach roles doubled.
I’ve named the Walker Rule after Madam C. J. Walker (1867–1919) who was America’s first female self-made millionaire. She was an African-American entrepreneur, hair care industry pioneer, philanthropist, patron of the arts, political activist and one of the 20th century’s most influential businesswomen. That’s unbelievably impressive given she was born only two years after the civil war ended.
The Walker Rule calls for diversity and inclusion in interviewing and hiring of startup co-founders, CEO, senior team, management, staff, board of directors and advisors and in choosing investors. While the specifics haven’t fully come into focus and care is needed to make sure it doesn’t turn into empty gestures or tokenism, The Walker Rule calls for committing to interviewing more than one woman, minority and/or LGBTQ candidates for all the roles mentioned above, though there is no quota or preference given in the hiring of candidates.
With that as background, the terms of the Startup Diversity and Inclusion Pledge under consideration are:
- The Walker Rule
- Workforce-diversity transparency and public self-reporting of diversity metrics
- Diversity metrics as a component of all executive and hiring manager’s incentive comp as determined by the company’s board and CEO
- Commitment to pay equality including equity
- Unconscious-bias awareness and training throughout the organization
- Create a formal discrimination and harassment policy
- Create a process for anonymous reporting of workplace issues related to discrimination and harassment
- Public commitment to the pledge
In addition to startup companies taking the pledge, I’ve developed a variant of the pledge that venture capital firms, angel investors and other sources of startup capital can take that will encourage diversity and inclusion among their investment professionals and the startups they back.
Click here to see the The Startup Diversity and Inclusion Pledge for Investors
The website to learn about the pledge, publicly take the pledge, and find resources to help support their commitment to the pledge is currently under development. If you are are ready to take the pledge, click here and be part of the initial roll out of the website later this year.
For the pledge support resources, I envision:
- Materials on why diversity and inclusion are important
- Assistance on how to implement the pledge
- Links to diversity and equality groups that offer support services and connections to diverse communities
- Startup diversity and inclusion awards, including an annual awards ceremony
Stephen Straus — I am a serial entrepreneur and former venture capitalist in Austin, TX. In my career, I have started, ran and successfully sold two companies and was also a General Partner at Austin Ventures, which at the time was one of the largest venture capital firms in the country. I am currently launching Kung Fu, an AI professional services firm and am a partner and mentor at Capital Factory.
Originally published at austinstartups.com on July 22, 2017.